As the dust settles around the state election results and the media hyperboles surrounding them, it is time to take stock of how they impact the economy and earnings. Given that the four states of Madhya Pradesh, Rajasthan, Delhi and Chhattisgarh are together less than 15% of India’s GDP, any change in their growth trajectory brought about by the new governments is unlikely to have much nation-wide economic impact. The stock market’s enthusiasm is instead related to the indications from these elections for the 2014 general elections and beyond.

But even there it is difficult to draw any conclusions, as these four states contribute only 13% of the Lok Sabha seats and house only 14% of the electorate. While a pro-BJP and an anti-Congress wave in the results cannot be denied, it would be premature and unwise to extrapolate these to the rest of the country.

In particular, the bipolar nature of the contests in three of these states effectively made every anti-Congress vote a pro-BJP vote. In the fourth, i.e. Delhi, leaders of the Aam Aadmi Party (AAP) have been active for over 10 years and provided a credible alternative. In 2014, in other states, where several regional parties are active and the contests aren’t merely between the Congress and the BJP, the arithmetic is likely to be much more complex. More so as all parties have been around for a while, so there is no perceptible forerunner. For example, in Uttar Pradesh how strong will be anti-incumbency for the SP, and will the voter swing to the BSP or the BJP? How will the fortunes of the RJD and the JD(U) change in Bihar, and can the BJP step into the vacuum? The answers to these questions will make all the difference in 2014, and last Sunday’s results provide no indications.

But these results do show several positive trends.

Firstly, across the four states, there was clear consolidation of votes: voters are learning to adjust to the “first past the post” system, and learning not to waste their vote. While the Congress may have lost seats, its vote share increased in Madhya Pradesh and Chhattisgarh. In Rajasthan, its vote share fell 4%, but that of other parties fell much more, and even the Congress polled more votes in 2013 than it did in 2008. This is the continuation of a trend seen in states like Uttar Pradesh where, despite quadrangular contests that